Is Private Campaign Finance a Good Thing? Estimates of the Potential Informational Benets

What would happen if the current US campaign …nance system, mostly based on private donations, were replaced by a public funding scheme of the same magnitude? It has been argued that public funding would deprive voters of useful information, but this can only be true if private donations are somehow targeted to ‘better’candidates. Using a survey-based dataset about the e¤ectiveness of state legislators in North Carolina, we ask what voters can learn about the characteristics of a legislator from the amount and pattern of contributions received during the campaign. The total amount that a candidate receives is a positive, but weak, predictor of that candidate’s e¤ectiveness. However, the sum of contributions below a given threshold ($2,000) is a positive and strong signal of e¤ectiveness, while the sum of contributions above such threshold is a negative signal of e¤ectiveness. We also …nd that only contributions from organizations